The Lixia District People's Court in Jinan has accepted a case brought by Bi Jiao, whose faulty products were repaired by Apple under warranty. The issue at the heart of the case is the fact that the company shortened the warranty for the new devices, failing to comply with China's consumer protection legislation. The case is due to be heard on September 14, according to China Daily
Ma Liwu, Bi Jiao's lawyer, claims that Chinese law requires when a company replaces faulty goods, they need to update the warranty, but Apple failed to do so. He said:
Apple failed to renew the warranty, citing the firm's internal rules. That limits the customer's rights and violates Chinese law.
Ma Liwu added
that the case marks a major step against what many regard as Apple's unfair business practices in China.
The legal problem could hardly have come at a worse time for Apple in China. According to the Wall Street Journal
, the smartphone competition in China is substantial and it is Apple that is suffering, down 37 percent in the second quarter. Analyst Chris Jones attributed Apple's decline to the fact that it is the most expensive brand and it is competing against a flourishing "grey market".
The publicity from the Bi Jiao, and other similar cases and reports, is likely to only further damage Apple's reputation. Last month a consumer advocacy group in the southern province of Guangdong placed Apple on a boycott list for its conditions of sale. The China Consumer Association has also described Apple's practices as "highly disturbing" and accused the company of "double standards", claiming that in other countries Apple complies with domestic consumer legislation.